Tim Harford presented three explanations for why so many prices in stores end in .99. They are:

• A .99 price requires the person at checkout to open the drawer and make change. This prevents them from giving the item away to the consumer and pocketing the money for themselves.
• Some believe that a price that ends with .99 is a mark of quality that makes consumers feel more comfortable.
• The most popular explanation, however, is that by the time customers see the .99 in $7.99, they already think the good is priced closer to $7 than $8.

To read more including why Harford decided to write this article, how changing eras have led to changing explanations, the role of psychology in economics, and what studies have suggested, click here.

Source: Tim Harford

Via: Marginal Revolution

Those who go to the library and those who go to the gym seem to have something in common, writes Fred Pampel. They’re both generally thin. According to his study:

• In theory reading a book is just as low calorie an activity as watching TV or playing cards. Yet those who read books have a lower weight than those who don’t.
• This connection is strongest for those who live in Western Europe. The relationship is less strong in Eastern Europe and other parts of the world.
• This relationship is stronger for women than for men.
• Some explanations for this link include:
  • Educated people are more likely to read books, and are also likely to understand the importance of good health and the steps needed to maintain a healthy body weight.
  • Graduating from college may give one the confidence necessary to pursue life-long goals and ambitions.
  • Those who read books likely exist in a social circle that values low body weight. Social norms might be driving weight loss.

To read more including other explanations for the relationship, how the study was conducted, what the data wasn’t clear on, which countries the findings were clearest in, and how you can lose 10 pounds, click here.

Source: Pacific Standard

Via: Freakonomics

Why do we go to college? Studies suggest that it doesn’t really teach us anything that is applicable to our careers. Economists argue that we go to college as a signal to employers that we’re the type of employees they want to hire. But Noah Smith disagrees:

• What does college signal? Intelligence? There are much easier ways to signal intelligence that don’t require four years. Just take a simple standardized test.
• Perhaps it signals dedication. The ability to work while others are out partying. This may well be true, but in Japan for example, companies hire based on standardized tests alone, and students go to college, and basically do nothing other than party. Why do they go to college then?
• It can’t be for partying alone – people enjoy smoothening out their consumption over time. Is college just meant to be four years of concentrated fun? Unlikely.
• College is actually about three things:
  • Motivation – why does anybody work? For those around them. But as you leave your home you no longer have your parents to work for. So you find friendships and romantic relationships and work for them. College screens the people to ensure that they are individuals who you would have a better chemistry with than a random person off the street.
  • Perspective – you meet all these different people headed in different directions and you see the range of possibilities available and what you are capable of.
  • Networks – building professional networks that help you later in your career.
• None of these things can easily be done online.

To read more including why people are encouraged to party in Japanese universities, how the Japanese make employment decisions, why it’s harder to find motivation in rich countries, the importance of attitude, the role that children play, the importance of diversity, why perspective probably isn’t as important in Japan, and what the word ‘college’ means, click here.

Source: Noahpinion

Via: Marginal Revolution

Antoine van Agtmael first coined the term ’emerging markets’ and for most of the past decade people have believed that they were the future. The tide, however, is now turning, he writes, and it looks like the United States may stay on top after all. There are five reasons why:

• Shale Gas. The United States has lots of it and is able to both use and export it.
• The erosion of low-cost advantage. Manufacturers shifted to India and China because of the cost savings. But wages have risen there while they stagnated in the US. Corporations can now consider manufacturing in the US.
• Ageing populations. China with its one child policy is ageing fast. America with its open immigration policy is not.
• Smartphones. China has done a bad job of encouraging the spread of smartphones while America has excelled at it, and they’re becoming increasingly important.
• Smarter competition. Companies like Caterpillar, Amazon, and Facebook have not taken the rise of China sitting down. They’ve evolved and adapted.

The comprehensive three page article written by a man who first predicted the rise of emerging markets – and now is predicting their relative demise, can be found here, where you can also read expanded bullet points about why each of these five things is giving America the advantage, and what the view looks like from emerging markets.

Source: Foreign Policy

App makers may be using manipulative tactics to make their apps seem more popular than they are, writes Ryan Tate, in a bid to draw investors. Highlights include:

• Those who produce apps have several avenues to artificially boost their numbers. They include:
  • Offering users virtual money in one popular app, in exchange for asking them to download another app made by the same publisher.
  • Spamming social networks such as Facebook.
  • Being slow in removing inappropriate content.
• The rewards from doing so can be substantial. Viddy, hailed by many as the next Instagram, raised $30 million. Its traffic decreased by more than 50% soon after.

To read more including other ways that apps can manipulate their numbers, other app-makers who may have engaged in these practices, what industry experts have to say, which app-stores are the most vulnerable, what the app-stores have tried to do, and why app-makers keep trying, click here.

Source: Wired

Brian Vastag writes that despite the Federal Government encouraging more people to become scientists, the jobs for these budding researchers just aren’t there. Highlights include:

• Traditionally scientists could conduct their research at academic institutions. However now just 14% of those with a doctorate in biology manage an academic position in the five years after graduation.
• At the same time the pharmaceutical industry has cut down on its research due to mergers, falling profits, declining investment, and outsourcing. One estimate suggests that 300,000 jobs have been lost since 2000.
• 38% of young chemists are unemployed. This is likely an under-estimate since many have found employment in low-skill jobs that don’t utilize their talents.
• Not all fields share this fate. Computer engineers, petroleum engineers, and physicists are doing remarkably well. Some even end up going to Wall Street.

To read more including why young scientists are now trapped in a Ponzi scheme, how post-docs have changed, the problem of debt, what scientists are now telling their children, what the experts have to say about it, where the jobs used to be located, and the stories of some who are trapped in this unenviable position, click here.

Source: The Washington Post

15 years ago Louis Theroux turned the cameras on the pornography makers and found a thriving industry. He returned recently to find that the internet had withered it away. Highlights of his article include:

• Big-name girls used to make $3,000. Now not only do they make much less, there are fewer ‘big-name’ girls around.
• Youtube like sites have risen that allow people to upload (often pirated) and watch porn films for free. This has killed the professional porn industry.
• Porn sites have increasingly tried to survive by making higher quality products. This is not all that different from the strategy of news organizations trying to survive in a world where the internet has changed expectations.
• Some of these high quality porn movies include parodies of famous films. One film called Iron Man XXX comes in a glossy two disc set. The Iron Man costume used on set cost $3,000.
• Women now use porn as a way to advertise private engagements where they can make much more money having sex with individual clients.
• It’s even harder for men. Fees have fallen to $150 or lower.

To read more including the moral issues related to the matter, the connection between Justin Timberlake and porn, when the tailspin started, the role of loyalty, changing norms, how studios have cut down on costs, the fate of Jon Dough, the inspiration provided by Hilton and Kardashian, the risks and irresponsibility of private engagements, and thoughts on where the industry may go, click here.

Source: Guardian

Via: Marginal Revolution

Trefor Moss writes “That’s globalization for you: A Chinese person turns off the air-conditioning, and the world economy catches a cold” and the Chinese are turning off their air-conditioning because the Chinese economy seems about ready for a collapse. He notes:

• Local governments are selling off the luxury cars they purchased during the height of China’s economic boom. This has made Ferrari nervous.
• “When the going gets tough, the rich head to the airport” – and more than 50% of China’s millionaires are considering moving to another country.
• Grocery prices are see-sawing. Egg prices have gone up so quickly that the term “Rocket Eggs” is now common among consumers, and pork prices (China ate 1.7 million pigs a day in 2007) fell so low that the government had to buy pork on the market to stabilize prices for producers.

To read more in what is an extremely well written article, with several witticisms similar to the one this post opened with, as well as to read more details, and find out why elaborate banquets might come to an end, the potential for future riots, what, exactly, “naked officials” are, and why it is likely to be a long hot summer, click here.

Source: Foreign Policy